The European Fund for Southeast Europe (EFSE) and Banca Intesa a.d. Beograd have signed a new loan agreement of EUR 25 million to boost the availability of financing to micro and small enterprises (MSEs), including rural entrepreneurs and small agriculture producers in Serbia. EFSE is one of the world’s largest development finance investment funds. It was initiated in 2005 by the KfW Entwicklungsbank (The German Development Bank) with the financial support of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the European Commission.
Majority-owned by the Intesa Sanpaolo Group, Banca Intesa Beograd is the largest commercial bank in Serbia, with the largest nationwide network, servicing over 1.5 million corporate and retail customers.
The proceeds of the EFSE loan will be used to finance the investments and working capital needs of MSEs operating in Serbia with longer term loans of up to EUR 100,000. The Bank will use a significant portion of the loan for MSEs in rural areas and individual agriculture producers, mobilising capital for a segment of the Serbia’s economy still significantly in need for financing.
The access to long-term financing remains limited in Serbia, mainly hindered by short maturities of customer deposits. The EFSE’s transaction will help the Bank to further diversify its funding base and expand its MSE loan portfolio. This is the second EFSE loan to the Bank to refinance MSE loans, following a EUR 25 million loan in March 2010.
Dr. Klaus Glaubitt, Chairman of the Board of Directors of the EFSE, said: “We are looking forward to expanding our successful cooperation with this second MSE loan. Micro and small businesses are critical for economic development and for generating employment opportunities. However, they often lack access to suitable finance. This latest loan will help overcoming this hurdle.” He added: “The EFSE loan will enable Banca Intesa Beograd to enhance its role in financing MSEs and to increase the competition in this sector.”
“Being aware of the potential of this segment of the economy and its strategic importance to the country’s economic development, Banca Intesa, as one of the leading banks in the Serbian market in the small business segment, offers continuous support to entrepreneurs and small enterprises in all aspects of their operations“, said Draginja Djuric, President of Banca Intesa’s Executive Board. “This continuation of our successful cooperation with EFSE will further strengthen our resolve to maintain intensive lending for this sector and remain a strong pillar of the domestic economy”, Draginja Djuric added.